On The Money: Trump to propose payroll tax cut over coronavirus | Congress weighs options to protect economy | Outbreak, oil prices drive market meltdown | Wells Fargo directors resign under pressure from Democrats

Happy Monday and welcome back to On The Money, where we could really use a moisturizing hand sanitizer right now. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL– Coronavirus, oil prices drive market meltdown: The twin threat of an expanding coronavirus outbreak and an oil price war hammered markets on Monday, raising the stakes of a global economic slowdown.

• A burgeoning battle between Russia and Saudi Arabia to flood world markets with cheap oil sent shockwaves through financial markets and rattled investors already reeling from panic driven by the global spread of the coronavirus.
• As prices for Brent crude fell 24 percent, all major stock indexes closed with heavy losses. The Dow Jones Industrial Average sank 2,014 points, or 7.8 percent, its worst day since 2008, while the S&P 500 index and Nasdaq composite fell 7.6 and 7.3 percent respectively. U.S. Treasury bond yields also plunged to record lows.

The climbing number of confirmed coronavirus cases in the U.S. and a lockdown imposed in northern Italy have also fueled fears that efforts to mitigate the virus’s spread could cause a global recession. The Hill’s Rachel Frazin and I explain what happened over the weekend and the toll it’s taking on the U.S. economy.

 

Impact of the oil price battle: 

• A flood of oil could mean cheaper gasoline prices for consumers, but it could also gut a crucial force behind global economic growth. 
• American oil producers could be hit hard, and oil industry companies could find it harder to get financing through the credit and bond markets. Overall, the drop in prices could also signal a harder slide for the global economy.

“What I’m looking at here is the market preparing for a much larger shock to the economy and uncertainty for the rebound that will follow,” said Joe Brusuelas, chief economist at audit and tax firm RSM.

Antoine Halff with Columbia University’s Center on Global Energy Policy told The Hill that he believes the drop will result in short-term job losses and could be disastrous for small companies but that large companies will probably come out stronger.

 

Trump waives off oil turmoil, coronavirus threat: President Trump sought to downplay the threat of the coronavirus and the impact of an oil glut on the U.S. economy, dismissing the fight between petroleum exporting nations and accusing the news media for drumming up unnecessary panic.

“Saudi Arabia and Russia are arguing over the price and flow of oil. That, and the Fake News, is the reason for the market drop!” Trump tweeted.

Trump also defied the warnings of public health officials in a series of tweets sprinkled throughout the market rout.

“So last year 37,000 Americans died from the common Flu. It averages between 27,000 and 70,000 per year. Nothing is shut down, life & the economy go on. At this moment there are 546 confirmed cases of CoronaVirus, with 22 deaths. Think about that!” Trump tweeted.

 

But Monday’s market meltdown is also ramping up pressure on policymakers to pump fiscal stimulus into the U.S. economy as it faces increasingly dire threats.

Trump on Monday said the White House will ask Congress to approve a payroll tax cut and relief for hourly workers to combat the economic fallout of the coronavirus.

“This was something that we were thrown into and we’re going to handle it, and we have been handling it,” Trump told reporters in the White House briefing room.

Trump also said that he would be asking the Small Business Administration (SBA) to issue loans to small businesses and that the administration was working with airlines, the hotel and cruise industries, which have been especially impacted by the spread of the virus. 

• Treasury Secretary Steven Mnuchin and White House economic adviser Larry Kudlow are also expected to meet with Senate Republicans on Tuesday to discuss potential ways for Congress to bolster the economy.
• A spokesman for Senate Finance Committee Chairman Chuck Grassley (R-Iowa) said Monday the senator is “exploring the possibility of targeted tax relief measures that could provide a timely and effective response to the coronavirus.”
• And Congress is considering a range of legislative responses to the coronavirus outbreak, from a paid national sick leave policy to tax relief for the hardest hit industries. 

 

Read more on the coronavirus outbreak and market meltdown: 

• Here are the lawmakers who have self-quarantined due to coronavirus
• Stock trading was halted Monday after the S&P 500 index fell 7 percent after the market opened, triggering an automatic freeze.
• House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles Schumer (D-N.Y.) are laying down an early marker for any potential economic legislative package as anxiety about the coronavirus has roiled the stock market.
• President Trump on Monday left a White House press briefing without taking questions about his own health after being in contact with lawmakers who have gone into self-quarantine over coronavirus concerns.
• Italy’s government on Monday announced it is expanding travel restrictions to the entire country amid growing fears over the spread of the novel coronavirus.
• New York City Mayor Bill de Blasio (D) urged people to work from home if possible as the coronavirus outbreak spreads across New York. 

 

On tap tomorrow:

• Wells Fargo chief executive Charles Scharf testifies before the House Financial Services Committee, 10 a.m.
• Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger testifies before the Senate Banking Committee, 10 a.m.
• The House Small Business Committee holds a hearing entitled “The Impact of Coronavirus on America’s Small Businesses,” 11:30 a.m.

 

LEADING THE DAY

Wells Fargo directors resign under pressure from House Democrats: Two Wells Fargo directors have resigned three days before lawmakers were set to grill them over their conduct while leading the scandal-ridden company, the bank announced Monday morning.

Former Wells Fargo Chairwoman Elizabeth “Betsy” Duke and James Quigley resigned from the bank’s board, effective Sunday, to “avoid distraction that could impede the bank’s future progress,” according to a statement from the two released by the bank released Monday.

“As the markets face increasing volatility, a strong Wells Fargo is needed now more than ever,” Duke and Quigley said in the statement.

“We believe that our decision will facilitate the bank’s and the new CEO’s ability to turn the page,” they continued.

• Duke and Quigley are set to face questions from the House Financial Services Committee on Wednesday after a report released by its Democratic members documented extensive missteps by senior Wells Fargo management. 
• Rep. Maxine Waters (D-Calif.), chairwoman of the Financial Services panel, called on Duke and Quigley to resign Thursday, saying both “failed in their responsibilities” to overhaul the bank and abide by legal orders with the Consumer Financial Protection Bureau (CFPB), Federal Reserve Board and Office of the Comptroller of the Currency (OCC).

I’ve got more on their decision here.

 

GOOD TO KNOW

• The Consumer Financial Protection Bureau (CFPB) on Monday sued Fifth Third Bank, alleging that it opened and charged fees on bank and credit card accounts for customers without their consent.
• Accountable.US, a progressive non-profit, is also calling Transportation Secretary Elaine Chao, a Wells Fargo director from 2011 to 2017, to answer for the bank’s behavior while she was on the board.
• Twitter and activist investor firm Elliot Management have agreed on a deal that will see Jack Dorsey continue as the social media platform’s CEO.